I know we’re focused pretty intensely on the elections, which are only two weeks away, but we always need to focus as well on underlying principles and concepts that drive our economy and our government. Elections come and go; this stuff is forever. In that vein, you really need to take a look at a new paper from the Mercatus Center at George Mason University, by Randall Holcombe:
Crony capitalism describes an economic system in which the profitability of firms in a market economy is dependent on political connections. The term has been used in the popular press but rarely appears in academic literature. However, there has been a substantial amount of academic research on various components that, when aggregated, describe crony capitalism. This literature shows that crony capitalism exists only because those in government are in a position to target benefits to their cronies, and have an incentive to do so, because they get benefits in return. The ability to target those benefits is a result of the spending and regulatory power of government, so big government causes cronyism. One remedy often suggested for cronyism is more government regulation and oversight of the economy, but this remedy misunderstands the cause of cronyism. The substantial and well-established economic literature on the components of crony capitalism shows that big government is the cause of crony capitalism, not the solution.
By “crony capitalism,” of course, he refers to lobbyists, and big business using those lobbyists to get more power and take more wealth away from the public. It’s the reason we had Occupy Wall Street, and why many folks still cry out for “regulation” to “rein in” big business and the big banks.
There’s a pervasive myth floating around the progressive left that pro-market advocacy necessarily means pro-business advocacy (and, by extension, anti-poor people advocacy). That is, as I said, categorically a myth, but that doesn’t mean people don’t believe it — they do. Kudos are due many times over to the Washington Examiner’s Tim Carney for doing yeoman’s work to try to dispel these myths, like this thorough and merciless rebuttal to Anna Palmer’s joke of a POLITICO piece on a supposed resurgence of corporate lobbyist influence in the White House if Mitt Romney wins the election, as if there’s nothing to see in the Barack Obama White House:
You mean after he kicks out the lobbyists in Obama’s White House like Patton Boggs lobbyist Emmett Beliveau (7), O’Melveny & Myers lobbyist Derek Douglas (8), and Pfizer’s, AT&T’s lobbyist at Akin Gump Dana Singiser (9)?
By that point in the column, Carney had already identified six registered lobbyists working in the administration; by the end of the thrashing, he identifies a total fifty-five registered lobbyists working in the White House.
Dr. Robert Lawson is the Jerome M. Fullinwider Chair in Economic Freedom in the O’Neil Center for Global Markets and Freedom at the Southern Methodist University Cox School of Business. Also, Lawson is co-author of the Fraser Institute’s Economic Freedom of the World annual report, which provides a widely-cited economic freedom index for over 140 countries. The CATO Institute has been partners in its publication since 1996.
As my former academic advisor, Dr. Lawson is a mentor and friend who introduced me to libertarian philosophy. A happy warrior with a dry sense of humor, his love of economics and freedom is inspiring.
Lawson is a member of the prestigious Mont Pelerin Society. He also writes at the popular economics blog, Division of Labour, which you should subscribe to.
Matt Naugle: How did you become a libertarian?
Robert Lawson: I actually wrote about this in a little book that Walter Block edited titled, I Chose Liberty: Autobiographies of Contemporary Libertarians. As with most people, I can trace this to a couple of influential teachers. First, Mr. Eaton at Princeton High School (Cincinnati) who gave me my first copy of The Freeman. Second, Richard Vedder at Ohio University.
My Twitter followers know that I’m a huge hockey fan and that I’m really upset that we have now entered the third work stoppage under NHL Commissioner Gary Bettman’s tenure. But the current lockout, like previous lockouts, has paved the way for the temporary flight of NHL talent to European countries so they can continue earning a paycheck and staying in game shape. That necessarily paves the way for a discussion of comparative politics and economics. Take, for example, the case of Swedish-born Nashville Predators forward Patric Hornqvist, who was going to sign with his former (pre-NHL career) team Djurgarden, even though they’re no longer in the Swedish Elite League:
Following in Roman Josi’s footsteps, the next Nashville Predator is heading overseas during NHL Lockout 2012, as Patric Hornqvist will reportedly play with Djurgarden, the team he played for before coming to North America. Djurgarden is currently in Sweden’s HockeyAllsvenskan, having been relegated last spring from the Swedish Elite League after a 35-year run.
A bit of controversy has been going around lately with the so-called “Poll Denialists.” These are Republicans and conservatives who believe that Romney’s current poll numbers, lagging Obama’s, are somehow false, a scheme by pollsters to deliberately skew the election towards an Obama victory, and are trying to explain it away with…well, I’m not sure what.
Jay Cost of The Weekly Standard mostly sums it up with “the polls are oversampling Democrats.” Robert Stacy McCain of The American Spectator just thinks it’s beyond any reason to believe that Obama is leading. And there is an entire website called “unskewedpolls.com” dedicated to finding the “true numbers” behind the polls.
This is pretty much balderdash, based on bad assumptions of how polling works and just plain fantasy. Stephen L. Taylor of Outside the Beltway focuses on the latter when he says:
Merely two weeks after Ben Bernanke announced one more round of quantitative easing (QE3), the results are already becoming apparent. And once again, it shows how the culture of “too big to fail” is both immoral and economically devastating.
The immorality of QE3 can be summarized by this quote, from Businessweek: “It’s very good to be a mortgage originator right now,”
Gosh, I wonder why? Is it perhaps because QE3 is benefiting banks/bankers…to the detriment of everyone else? But I thought our president wanted the top 1% to “pay their fair share”! So how do bankers and loan originators end up cashing in on yet another bailout? Yes, I realize I shouldn’t be shocked by a politician saying one thing…and doing the opposite. But I am.
Since images often speak louder than words, here’s an illustration of why it’s “…very good to be a mortgage originator right now”.
This is what Bernanke imagines QE3 is doing:
And here is what is ACTUALLY happening:
I rest my case.
Jason Pye has written a great blog post about libertarians and the Romney campaign already. He asked me my opinion about it, perhaps even with the possibility of a “point-counterpoint” sort of thing. I pretty much agree with what he’s saying, particularly about Ron Paul and the Libertarian Party. We are not a monolithic group; we are a very wide and very diverse range of individuals who just want to increase individual liberty.
What I want to add is that, while Republicans and conservatives complain about us, and want us to support them in elections, they have done nothing to earn such support. Let me show you a few examples:
A Romney administration would listen much more closely to a libertarian movement that supported him.
— Brandon Kiser (@Kiser) September 24, 2012
To which I responded with:
@BrandonKiser Then maybe he should do more to support the libertarian movement.
— Jeremy Kolassa (@jdkolassa) September 24, 2012
And to which I got this response:
@jdkolassa I didn’t say it wasn’t a two way street. But I’m pretty sure I know which side burned their bridge first.
— Brandon Kiser (@Kiser) September 24, 2012
House Republicans have recently put forward a new bill, H.R. 6213, otherwise known as the “No More Solyndras Act.” It was passed by the House Energy & Commerce Committee on August 1st, and sounds quite promising when you consider the colossal mistake that Solyndra, supported by federal loans, was. It’s estimated that taxpayers will lose over half a billion dollars on Solyndra, which went bankrupt last year. Preventing that from happening again is a great idea.
Unfortunately, the Republicans backing this bill are not really saving you from another Solyndra, or Beacon Power, or Abound. For the “No More Solyndras Act” leaves a gaping hole—as in, everything before December 2011 is still totally cool.
See, it’s “No More Solyndras,” not “No Solyndras.” As the text of the bill makes plain, the Act only prevents new applications from new companies, not applications from ones “grandfathered” in:
Occupy Wall Street - what’s that? They’ve gone away, right? They haven’t. They’re regrouping and preparing to ramp up. Nick Tomboulides, Andrew McCaughey, and Danielle Saul recorded some remarks made by Mike Golash, former President Amalgamated Transit Union, Local 689, and others at a OccupyDC meeting held August 19, 2012.
They are not hiding their goals anymore - and no matter what your stance on the current state of our government, what is being said here should shock all patriots.
GOLASH: Progressive labor is a revolutionary Communist organization. Its objective is to make revolution in the United States, overthrow the capitalist system, and build communism. We’re trying to learn something from the historical revolutions of the past, the Russian revolution, the Chinese revolution, the revolutions in Cuba and Eastern Europe.
What can we learn from them so we can build a more successful movement to transform capitalist society?
The “historical revolutions of the past” don’t include the American Revolution - a revolution which created true freedom and prosperity and has been a model for such - but includes revolutions in which dictators were created who brutally tortured and slaughtered millions of their own people?
Recently elected socialist French president François Hollande.
While I’m not sure I always buy whole-hog the amorphous concept of “regulatory uncertainty,” brought on by the administrative state, as a catch-all explanation for everything wrong with the private sector and our nation’s current unemployment crisis, a fascinating Bloomberg Businessweek Global Economics feature from May 2012 looks at French labor policy (emphasis mine):
[France] has 2.4 times as many companies with 49 employees as with 50. What difference does one employee make? Plenty, according to the French labor code. Once a company has at least 50 employees inside France, management must create three worker councils, introduce profit sharing, and submit restructuring plans to the councils if the company decides to fire workers for economic reasons.
French businesspeople often skirt these restraints by creating new companies rather than expanding existing ones.